Originally Published in the May 1987 issue of The Outfitter Magazine.
The results of the NOTO membership survey have finally been tallied with the region information having been gleaned from the data set. The survey conducted in the summer of 1986 offers a snap shot picture of the state of the northern tourism industry as it existed in 1985.
Since that time, of course, we have witnessed the boom year of 1986 and may likely see another boom in 1987. As a result some of the data presented is somewhat dated. Revenue and expenditure figures will have been higher for 1986 and for 1987. It must also be noted that the survey sought information from operators and did not check either financial statements or audited records. This has resulted in a data set that is more reflective of industry trends rather than illustrating exact dollar figures.
The sample size was sufficiently large to enable regional data to be analyzed. Because of the small sample size (3), Eastern Ontario has not been broken out by itself.
A total of 203 usable questionnaires were analyzed to produce this snap shot picture. This figure represents over 25 per cent of all NOTO members at the time the study was conducted.
Table 1 illustrates the state of the remote tourism sector as it appeared in 1985. The table shows an industry profile as a whole, as well as a profile of the lodge sector by each OTAP travel region.
The March, 1987 edition of the Tourist Outfitter presented a detailed industry profile. This month we will compare each region with the industry in general.
In order to do so, however, it’s necessary to remind readers of where the industry stood in 1985.
According to our survey, the industry is very stable, with the average operator having been in business for 14 years. This suggests an annual turnover rate of about 7 percent. Average gross revenues exceeded $186,000 per camp.
Four out of every five operators offered cabins for rent and nearly half had some type of trailer park or campground. About one quarter of operators had motel units and another quarter rented outpost camps. Most operators offered more than one type of facility.
Businesses were small, averaging about eight cabins per camp. Outpost operators offered, on average, five outposts per camp.
Only one in four base operations was a non-road accessible operation, while three in four were road accessible. The location of the base does not infer the degree of remoteness. Many road accessible operations have remote camps. It is estimated that nearly half of the industry has at least one non-road accessible component.
Fishing and hunting were by far the principal activities stated. About eighty percent of all camps province-wide rely on fishing and hunting for their livelihood.
The average operation employs 2.6 family members and 6.6 non-family members with an average payroll of $37,700. Labour costs comprise a major component of all expenses averaging over 20 percent of gross revenues. Labour costs at American Plan rates can approach 50 percent of revenues.
On average, the tourist industry invests about 4.6 percent of gross revenues on marketing. Each year, the average camp will spend $8500 to promote its product.
Interestingly, trailer parks are most popular in the northwest, in Sunset Country and in the NOSTA region. They are least popular in central northern Ontario.
Revenue: Gross revenues show wild variations across the north, ranging by as much as 260 percent from the Near North to Sunset Country.
The average gross income from both the Near North and the North of Superior regions was less than half the provincial average, while income from the James Bay Frontier was about three quarters the average.
It is clear that the northwest is by far the most stable region when comparing total incomes. The average operation in Sunset Country grosses nearly $250,000 per year.
The only other area with above average incomes was Rainbow Country. This figure is somewhat misleading, however, as one extremely large operator has shown higher level figures.
Principal Activity: Fishing and hunting remain dominant throughout the entire north, although it is most important in the far north and the west.
In the highly populated areas of southern, northeastern Ontario, where influences of southern resort are trickling in, two-thirds of all operators listed their principle activity as fishing or fishing and hunting.
It must be noted that this was an unaided question on the questionnaire. Operators were asked “What is your principle activity offered?” followed by a blank space.
Algoma Country and the James Bay Frontier met with the provincial norm, while Sunset Country clearly placed the greatest emphasis on fishing. In the northwest, 9 out of 10 operators’ principal activity was fishing and hunting.
Access: Algoma Country is the last bastion of large scale remote tourism facilities. More than half of all operators surveyed had a remote base of operation. By comparison, Sunset Country had close to the provincial average of 22 percent and the Near North had very few remote operations.
Staff and Payroll: The average operations employed between 2 and 3 family members and about 7 non family members. Most travel areas adhered to this provincial average. The only exceptions are Sunset Country and James Bay Frontier.
The slightly higher number of non family employees in Sunset Country may reflect a tendency toward more American Plan resorts in this area and may also simply be a reflection of larger operations. Conversely, the small number of employees in the James Bay frontier area is a direct reflection of the downscaled size of many operations.
Stability of Industry: Great variations were noted in the average number of years operators had been in business, a key component in analyzing industry stability. In Sunset Country, where a mature, relatively stable and profitable industry exists, operators had been in business the longest. The average number of years in business was greater than 17, indicating a turnover of less than 6 percent per year. Similarly, Rainbow Country, for the most part, has a mature, stable industry as suggested by the high length of ownership.
It is in those areas where the bulk of forestry activity is occurring, coupled with a relatively large resident population clamoring for new fishing opportunities that the industry is least stable. In the James Bay Frontier area, this problem is compounded by relatively few water bodies. Here annual industry turnover approaches 10 percent, nearly double that of Sunset Country. Similarly, Algoma Country and North of Superior have significantly shorter average length of ownership figures.
It is also interesting to note that those areas with the largest proportion of road accessible base lodges are more stable than areas with fewer road accessible base camps.
It is suspected that the mush of the instability is a direct result of formerly remote facilities being accessed for logging activities, forcing operators to sell their businesses as their resource and client bases are eroded. This is a trend that will have to be monitored closely.
Size of Operation: Across the north, the tourism cabin is the backbone of the industry. Regardless of which region is analyzed, cabins provide the majority of tourist lodging. Ranging from a low of 70 percent of operators in the NOSTA region to a high of 93 percent in Algoma Country, the cabin predominates.
Motel units enjoy moderate popularity in all regions except the North of Superior area. In the Near North about 40 percent of all facilities have some type of motel unit on their property. Motel size varies significantly across the north. In the southern reaches of the province, the average unit size ranges from 11 to 15, while in the more remote north, average motel size in only five or six units.
Outpost camps are virtually unknown in the Near North and in Rainbow Country, while they compromise a significant component of the industry in Sunset Country and in the James Bay Frontier. In the southeast portion of the NOTO region very few remote areas exist, while in the far north and northwest, there is still some wilderness areas capable of supporting an outpost industry.
Payroll averaged close to 20 percent of gross revenues across the province. It ranged from a low of 17.7 percent in Algoma Country to a high of 25.4 percent in the Near North. Those areas with the lowest gross revenues generally paid a higher proportion of their gross in salaries. The two areas with the highest salary revenue ratio are the Near North and the North of Superior area. Sunset Country, however, with the highest average gross income ranked third in the salary to gross revenue ratio. This area also had the largest average staffs.
Marketing: It is interest to note that the least stable area, in terms of length of ownership, spent the greatest proportion of total income on marketing. The operators in the James Bay Frontier area spent, on average, fifty percent more than the industry norm.
The most stable areas, on the other hand, spent close to the industry norm. Sunset Country operators invested 4.7 percent of their gross revenue in marketing.
Gross revenues do not seem to relate directly to marketing effort. The Near North with the lowest average income spent the second greatest percentage of their income on marketing, while the North of Superior area with the second lowest incomes invested the least amount on marketing. Similarly, Rainbow Country with the second highest income was well below the provincial average for marketing dollars invested. Conclusion: Northern Ontario’s tourism industry is varied and complex. Each travel region has its own industry characteristics and exhibits its own profile when comparing plants, accessibility, staffing, revenues and marketing.
Above all else, one characteristic is readily evident. This sector is highly dependent on fishing and hunting for its livelihood. Anywhere from two thirds to ninety percent of business is derived directly from fishing or fishing and hunting.
In those areas where the resource base is in transition due to logging activities, industry stability is threatened, which affects gross revenues and marketing efforts.
Truly, the northern Ontario tourism experience is a vast agglomeration of different components.